Correlation Between Loncor Gold and JNC Resources
Can any of the company-specific risk be diversified away by investing in both Loncor Gold and JNC Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Loncor Gold and JNC Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loncor Gold and JNC Resources, you can compare the effects of market volatilities on Loncor Gold and JNC Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Loncor Gold with a short position of JNC Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loncor Gold and JNC Resources.
Diversification Opportunities for Loncor Gold and JNC Resources
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Loncor and JNC is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Loncor Gold and JNC Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNC Resources and Loncor Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Loncor Gold are associated (or correlated) with JNC Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNC Resources has no effect on the direction of Loncor Gold i.e., Loncor Gold and JNC Resources go up and down completely randomly.
Pair Corralation between Loncor Gold and JNC Resources
Assuming the 90 days horizon Loncor Gold is expected to generate 27.19 times less return on investment than JNC Resources. But when comparing it to its historical volatility, Loncor Gold is 8.73 times less risky than JNC Resources. It trades about 0.03 of its potential returns per unit of risk. JNC Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3.00 in JNC Resources on October 25, 2024 and sell it today you would lose (1.20) from holding JNC Resources or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 23.68% |
| Values | Daily Returns |
Loncor Gold vs. JNC Resources
Performance |
| Timeline |
| Loncor Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| JNC Resources |
Loncor Gold and JNC Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loncor Gold and JNC Resources
The main advantage of trading using opposite Loncor Gold and JNC Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loncor Gold position performs unexpectedly, JNC Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in JNC Resources will offset losses from the drop in JNC Resources' long position.| Loncor Gold vs. Galiano Gold | Loncor Gold vs. Brunswick Exploration | Loncor Gold vs. B2Gold Corp | Loncor Gold vs. Japan Gold Corp |
| JNC Resources vs. Argo Gold | JNC Resources vs. Advance Gold Corp | JNC Resources vs. Blue Star Gold | JNC Resources vs. Minnova Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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